Landlords renting a property in either England or Wales may be required to procure an HMO licence for their property.
What is an HMO?
HMO stands for Houses in Multiple Occupation.
A property is classed as an HMO if it is rented out to at least three people who are not from the same ‘household’, and who share facilities such as a kitchen and bathroom.
For example, a property would not be considered an HMO if it was rented out by two parents and their adult child, but would be if rented out by three friends.
What is a household?
A household is a family unit and includes spouses, civil partners, parents, grandparents, children, grandchildren, brothers, sisters, uncles, aunts, nephews, nieces or cousins. Step or half-relatives are considered to be family in the same way.
Do I need a licence?
In England and Wales you must have a licence if you are renting out a large HMO.
In order to be classed as a large HMO, the following must apply:
- The property is rented out to five or more people from more than one household
- Some or all tenants share toilet, bathroom or kitchen facilities
- At least one tenant pays rent (or their employer pays on their behalf)
- In Wales the property must have three storeys or more. This does not apply to properties in England
And for smaller HMOs?
Some councils require additional HMO licensing for properties in their locale. This is particularly the case in London where many councils introduced new licensing requirements in 2022.
Additional licensing does not have to apply to an entire area - it may also only apply to certain types of smaller HMOs.
The best place to check whether this applies in your area is your council’s website.
Are there any exemptions?
The Housing Act 2004 does list some exemptions from HMO licensing, this includes, but is not limited to:
- Properties managed by local housing authorities, registered social landlords, emergency services, or health service bodies
- Certain student halls of residence
- Buildings occupied principally for the purposes of a religious community, e.g. prayer
- Buildings that are occupied by the owner and no more than two lodgers.
How do I apply?
If you require a licence then you will need to submit a licence application to your local council along with your application fee.
Your council will have a set process for how to do this, the details of which you will find on their website.
You will likely be asked to provide certain supporting documentation such as a floorplan, a valid gas safety certificate, and a valid EICR. Specific documentation will vary for each council, so again, we recommend that you check your council’s website.
How long does a licence last?
An HMO licence is valid for a maximum of five years and must be renewed before it expires.
Are there any penalties for not having a licence?
There are strict penalties if you are found to be renting out an unlicensed HMO. Potential penalties include:
- Unlimited fines
- Rent Payment Orders (this could require you to repay up to twelve months of rental income)
- Banning orders - this will also place you on the rogue landlord database and prevent you from being able to let properties in the future
- Prosecution
Additionally, not having an HMO licence if required could affect your ability to serve a Section 21 notice of eviction. In fact, it is not possible to serve a Section 21 until either you have applied for a licence or you have been granted a temporary exemption from applying by the local authority.
We would, therefore, recommend that you check which licensing is required with your local council before advertising your property.
You can read more about HMO licensing on the government website.
- Houses in multiple occupation (HMO) - How can I advertise rooms?
Information on this site is by way of general guidance only and may not apply in your particular circumstances. You should not act or refrain from acting upon information on this site without seeking independent legal advice.